Secure your rent roll with quality systems

Having all our systems, procedures and policies clearly documented gives us much more time doing the tasks that are directly linked to income producing.

If documenting your systems, procedures and policies is on your "to-do" list, it’s time to stop procrastinating and start creating Quality Management. It’s a big commitment but the benefits will appear in areas of the business you haven’t even considered. Story by Dennise Herrick.

Elders Real Estate Alstonville in north eastern New South Wales is managed using the concept of what we call Quality Management, which simply means having every task and policy in the organisation documented and endorsed by all department staff members.

It sounds simple but it requires total commitment by management and staff. Most importantly, it must be subject to regular review and continuous improvement.

At the heart of what we do, the basic idea is one of continuous improvement. We ask, "What do we do? How can we do it better? If there is a problem – how can we ensure that it does not happen again?"

Having all our systems, procedures and policies clearly documented gives us much more time doing the tasks that are directly linked to income producing, such as growing the rent roll. That requires dedication to the tasks associated with continuous improvement and quality management.

Clearly written policies and procedures minimise management’s time spent on putting out fires, fixing mistakes and training staff – which provides additional time to get on with business development and income generation.

Staff are able to continually refer to the system and hopefully get it right the first time. It also gives the management confidence in knowing that staff have documented procedures which set out exactly what is expected of them and where their boundaries lie. How many times have you heard a staff member say that they didn’t know they were supposed to do it that way or they must have misunderstood the direction? Quality Management doesn’t allow for these excuses.

It is a huge asset for new staff. Even though management may have employed an experienced Property Manager or Property Officer, do they know how things are done in your particular office? They may know the legislation but what about your policy on say rent arrears or handling repairs or inducting a new landlord?

New staff will still need individual training but the time spent by other staff members is greatly reduced. The new staff member simply refers to "the system". Quality Management can turn an ordinary staff member into a much more proficient operator. Staff are more confident in their jobs and therefore happier. This can help radically reduce staff changes, which of course benefits the entire department and indeed the whole business operation.

Studies have shown that in service industries (and that is what real estate property management is) over 85% of papers generated have at least one error and fixing these runs to at least 25% of the operating expenses of any function. That means that one dollar out of four is spent doing things over. The obvious conclusion from that is documenting systems and ensuring policies and procedures are followed, saves both time and money.

The flow-on effect of that to clients should also be obvious. Getting it right the first time will also greatly improve client relationships. The benefit of this is that it is much more cost effective to retain customers than to create new ones. Repeat and referral business is the best form of marketing available.

When marketing of the department does occur, the actions delivered by the property management department match the message being sent by the advertising or promotion – here is an efficient, effective property management business that clients really do want to deal with and can rely on to competently manage their investment properties.

A Quality Management system is also a great listing tool for new managements. When a prospective landlord sees the property management manual, which is all the documented systems, they get some concept of the tasks involved and the commitment of the business to effectively managing the investment. Landlords can sometimes think that managing a property is just collecting rent and doing the odd inspection. Quality Management shows them otherwise. It is a very useful tool when negotiating fees.

Quality Management systems are also very useful when problems occur. Producing copies of your systems goes a long way to substantiate your evidence. It is a risk management/risk minimisation system.

Where do you begin? What should be included? List every task that you perform in the Property Management department and put them into categories such as: 

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